How to Reduce Customer Churn – 6 Actionable InsightsCharlie Bedell
A recent Gallup study reported that almost 70% of customers are ready at any time to take their business elsewhere. These results are surprising, especially when most businesses believe they have the pulse on their customers, offerings, and competitors. However, Gallup claims that many businesses lack an accurate understanding of their customers, including what their customers want, need, and expect throughout the business relationship. This results in what every business wants to avoid—customer churn.
There are a few key ways you can take to keep customer churn to a minimum. Use this article to learn pragmatic, actionable best practices for reducing customer churn in your business.
Improve the onboarding experience
In psychology, the Primary Effect explains our tendency to remember the first moments of an experience better than subsequent ones. This means that the first experiences your customers have with your business are likely to be the most lasting. For this reason, a quality onboarding process is one of the most important ways to retain customers.
Customers particularly appreciate simple, self-service onboarding. See if you can consolidate steps in your onboarding process into easy-to-digest articles, product tours, and tutorials in short written and video formats. This allows customers to onboard at their own pace in their preferred learning style. In turn, your team has more time to work directly with large accounts or provide support when customers need it. Better onboarding reflects positively on your business – leading to better customer retention rates in the long term.
Set expectations early and often
Even with an excellent onboarding process, it’s important that you set expectations for what working with your business will look like going forward. One way to do this is by creating a roadmap for customers. A roadmap lets customers know the steps they need to succeed with your business after they’ve onboarded. Importantly, it sets the standard for what clients should anticipate from your business.
In your customers’ eyes, onboarding is a snapshot of the rest of their relationship with your business, and when done well, it can leave them with a vision of how they can grow with you.
Prioritize building a relationship
Building intentional relationships from the start retains customers and increases their loyalty. But this doesn’t necessarily mean that your team needs to invest large amounts of time and energy on it. Just a simple email can go a long way.
Consider sending personalized emails periodically to customers at different stages of your business relationship. They can be short messages that provide links to helpful resources, information about new features or offerings, and content from your business, including how to contact your team if needed. To save time creating these messages, take advantage of the many online applications that can automate messaging for you. These applications let you set and forget the emails you send while leaving communication channels open for customers.
Be proactive with communication
Loyalty-building relationships with your customers go two ways. Communicating with customers means reaching out before they need you in a way that feels personalized and thoughtful.
Here are a few ways to engage with customers:
- Schedule regular communication, including emails at least every week and daily social media posts. A consistent effort to communicate sends the message that customers are always on your mind.
- Diversify the kinds of communication you have with customers. Provide promotions and contests, send helpful product or service information, and share inspiring or entertaining content related to your business.
- Provide multiple channels to interact with customers, including in-person, email, phone, chat, social media, and your website.
- For large accounts, assign a member of your team to routinely reach out with a personalized email or phone call. This lets you check in on valuable customers and get feedback.
Maintaining regular communication with customers can open channels for loyalty, problem-solving, and teamwork. And when customers feel like you genuinely care about their success, they’re more likely to stay with you for the long run.
Analyze churn when it happens
Customer churn is a percentage of customers who no longer purchase or interact with your business. Your churn rate is the number of customers lost during a specified period divided by the total number of customers you had at the beginning of that period.
Some customer churn is inevitable. Instead of counting it as a complete loss, leverage the information to your advantage. Every customer who takes their business elsewhere leaves you with a wealth of data on how to prevent future churn.
Use these questions to get the right information for analyzing churn:
- When are customers most frequently churning?
- At what price point do customers most frequently churn?
- Does churn correlate to a specific step in using your product or service?
- Are there features, services, or improvements customers ask for that aren’t met?
- What reasons do customers cite for leaving?
Armed with this information about churned customers, you can then analyze which of your existing customers are at risk for churn and reach out before they leave. Don’t make the mistake of simply offering a discount or incentive to these customers. Instead, get to know what’s working for them, where their pain points lie, and how you can continue to support them. These discussions can provide further information to combat future churn.
Additionally, make sure to direct your focus on your most profitable customers who are likely to churn—and listen to them carefully! While it may seem vital to reach out to all customers on the brink of churn with the same amount of attention, the best way to maximize your profits long term is to spend the most time with your largest accounts.
Ask for feedback and act on it
Your customers are your best resource for reducing churn. They’re a direct line to what’s most important and how your product or service helps customers. While many businesses may listen to their customers, they don’t always act directly on what they learn. This sends the message that customers’ insights aren’t that important—and that the business may not truly care.
This leaves your business the opportunity to be different. When working with customers, listen for and act on:
- Feedback customers provide about your product or service
- Roadblocks or workarounds customers experience
- How customers plan to use your business in the future
Use the information customers voluntarily provide as a guide for the future of your product or service. This ensures that your business continues to align with customers’ needs and offers genuine value. Perhaps more than anything, acting on feedback sets you apart and significantly reduces churn.
These insights can both maintain your current customer base and help you continue to grow your business. While many of these best practices for reducing customer churn seem simple, they can make a significant, lasting impact on customers’ perception of your business, leading to the kind of consistent growth your business strives for.
See how TimeTap can help improve your customer onboarding and retention efforts.